New Condominium Law and Building Management Plans

As the real estate market develops in Turkey the Condominium Law is becoming the center of attention. Turkish Parliament amended the Condominium Law No. 634 with a new Law No. 5711 and it was published in the Official Gazette at November 28, 2007 (‘Turkish Condominium Law’ or ‘TLC’).

Flat ownership is a particular type of ownership on a terrain, which is suitable for separate utilization of multiple divided units as real assets and as savings depending on the land share. It is a private ownership relevant to the land share and to the common areas within the main real asset (TCL Article 3). According to TLC independently usable units such as flats, apartments, offices, shops, stores, cellars, storages can be made subject to independent ownerships although constructed over a unified land or building ownership right over the real estate.

This new law aims to resolve different kinds of problems due to the new concept of collective construction and of condominiums in Turkey.

Building management plan is a binding agreement between flat owners, which is consistent with the mandatory provisions of the law, regulates manner and intention of utilization of the main building, divided units and of the common areas, rights and obligations of the management and inspection. These plans are registered to the title registries of such real estate and become the main endorsing facts of limitation for ownership rights.

As the concept of ‘residence’ buildings in the legal form of condominiums became more popular the building management plans are now more sophisticated than before. In addition to regular building maintenance stricter rules regarding services and limitations to right of ownership of independent units are relevant.

In case of dispute among the right holders in condominiums the management plan is applied along with TCL. Since every management plan is unique to its own real estate its designations are significantly important for owners. This plan, which regulates all the managerial and business issues of the building(s), is referred to in every dispute and co-exists with the building in its lifetime.

The new TCL brought some flexibility in quorums for decision making regarding building management resolutions and amending the existing plans. Making modifications as construction, reparation, building a new facility, changing the exterior distemper at the common areas unless written consents of every single flat owner are previously obtained was forbidden in the former version of the law. The new TCL makes a break for owners and designates that written consents of 4/5 of the flat owners is sufficient to make such adjustments.

As another tool for management it is stated in the new TCL that condominium shareholders are obliged to allow the inspection of their independent units in the building for the safety and technical reasons. In addition the new TCL provides an emergency intervention methodology that can be executed by the Courts for urgent building prevention measures to be taken without the consent of the independent unit owners.

Building management plan is a mandatory regime. The new TCL made it more clear by stating that the right holders for such co-owned real estates with common areas that acquire building usage certificate provided by the district municipalities as the final permits to commence the use of the building shall first organize their ownership status under condominium principles and accordingly shall execute and register a building management plan within two years following the execution of the law.

According to the aforementioned amendment, all the expenses for the conservation of the construction are included in the common disbursements of the real estate. The flat owner (condominium partner) who refuses to defray the charges for which he/she is responsible shall pay 5% of indemnification in arrears monthly for each day delayed.

Furthermore, in a country under the high risk of earthquake such as Turkey, following provision is critically important. In his/her divided unit, flat owner is banned to perform any reparation, construction or adjustment in a damaging manner for the building. This expression was already present in the TCL however with the addition of the phrase “bearing chords, columns, load-bearing walls and other elements of the bearing system” to the Article 4/1 sub-article (a), it is made clear that the structure of the building especially the ones matter for earthquake prevention became parts of the common areas of the condominium ownership sharing model.

The new TCL apparently provided more room for building managements to execute and dictate some new measures against the owners. Accordingly the management plans could be of an asset or a burden for independent unit holders and therefore purchasers should examine the details of the management plan of the real estate along with its title very diligently.